Weathering the Economy: How Tilt-Up Contractors are Handling the Downturn

It is no secret that the economic downturn has had a profound impact on the construction community. Markets are down, competition for projects is greater, and contractors are being pressured to reduce costs. One of the keys to success for contractors surviving these trying times is industry support. The site case Tilt-Up concrete industry has rallied around contractors to provide them with tools to not only survive the current climate, but also be set up for success when the market recovers.

INDUSTRY CHANGES

Like every other industry, the Tilt-Up community has seen several changes since the downturn. “I’ve seen more attention focused on converting buildings from a competing system to Tilt-Up,” said Jim MacKinnon, Senior Preconstruction Manager at Saunders Construction, Inc. in Centennial, Colo. “There is far more work being done on the front-end of the project to determine systems, offer budget comparisons and schedule evaluations than ever before.”

This provides an advantage for savvy Tilt-Up contractors who can assess the value that a conversion to Tilt-Up can offer a project. Projects that may not have been previously considered Tilt-Up as an option are now being successfully converted for cost and schedule savings.

“With money being funneled into infrastructure and government projects as part of the stimulus package, more publically funded projects such as schools and civic buildings are attracting attention, said Ed Sauter, executive director of the Tilt-Up Concrete Association (TCA). “Contractors who tended to specialize in one type of structure are now expanding their horizons as competition toughens. This will benefit Tilt-Up in the long run as contractors develop expertise in finishes, techniques and other skills needed to compete in broader markets.”

SURVIVING THE TOUGH TIMES

Armed with entrepreneurial spirit and determination, contractors are better suited to handle changing market conditions than other professions. “By our nature, contractors are primitive,” said Shawn Hickey, Vice President of Construction at SiteCast Construction Corp. in Ottawa, Ontario. “Many of us started with little and have never forgotten those days.”

Contractors have to wear many hats and this adaptability enables them to handle downturns more effectively. It is not enough for a contractor to understand the construction process. Rather, he or she must also be a businessperson. Savvy contractors create business plans that allow them to monitor their firm’s growth. “Business fundamentals allow contractors to carefully downsize in a methodical approach versus a ‘slash and dash,’ dump assets reaction,” said Hickey. “Monitoring the financial markets, staying on top of cash flow and job costing is paramount to continued success. This ‘new norm’ is a condition we all must acknowledge, embrace and move forward.”

Randy Simmons, president of R.R. Simmons, a design/build firm in Tampa, Fla., concurs with Hickey. “One of the biggest mistakes firms can make in a tight economy is lingering in the mode of denial,” said Simmons. “When you think you see it slowing down, it has already swung to the negative.”

The good news is that contractors have several options available to them to survive the tough times. Contractors are using the time to evaluate their current operations. “We are examining and fine-tuning our processes and products,” said Simmons. “While we have the luxury of time, our entire staff is in an extensive training and research mode. Spending our time smartly is our best investment at this time.”

Many are using this time to invest in their firm to be prepared for when the market returns. “We have used the market correction to invest in corporate software for cross-platform accounting, estimating and project management,” said Hickey. “Data management, marketing, advertising and a new website for all our companies have been a priorities for the past 14 months. Being prepared for the upswing is our business model, and staying afloat by being lean, cautious and methodical. These business objectives have allowed us to maintain our local market share.”

Hickey notes that contractors can use their time to promote Tilt-Up to new owners, designers, and untapped industries in their region, including schools, religious institutions, government agencies or other sectors that have been injected with stimulus funds. “It is critical to a contractor’s success to follow and try to predict who will be obtaining funding,” said Hickey.

In addition to refining internal processes and pursuing stimulus projects, many contractors are diversifying their service offerings. “In recent months, I have heard of many contractors expanding their services beyond Tilt-Up,” said MacKinnon. “For example, some are now shifting focus to placing and finishing slabs/flatwork, performing foundation work or elevated concrete. Diversification is key to surviving this downturn and most contractors are embracing this through expanded services or simply pursuing work beyond their typical geographic area.”

WHY TILT-UP IN THIS ECONOMY

For decades, Tilt-Up has been a sought after construction method for projects with tight schedules and budgets. This economic climate is pushing margins even tighter and Tilt-Up offers several advantages that are attractive to owners and developers. By using Tilt-Up, contractors have greater control of the schedule because they are not dependent on subcontractors. Construction starts while design is still in progress. Tilt-Up allows trades to work on the facility sooner, provides a slab for a work area for more efficiency and many phases can proceed simultaneously. Tilt-Up has long-term advantages in terms of durability and low maintenance.

“The Tilt-Up industry has adjusted and reacted to the changing market conditions with lower and more competitive material and labor pricing,” said MacKinnon. “Coupled with speed, Tilt-Up is a very attractive option to fiscally-minded owners.”

MacKinnon also notes that they have seen more decisions being made with regard to speed of construction and schedule, rather than simply pricing, since owners have to spend more time preparing for a project in terms of procuring financing, securing approvals through muncipalities, etc.

“It is important to note that many owners are keenly aware of the current market’s financial benefits and do not want to miss a good deal,” said MacKinnon. “The faster they can get a project built, the more money they can save on capital expenditures and construction loans.”

More than just a solution for buildings, Tilt-Up has also been successfully used for decades for non-traditional projects. “With much of the stimulus program funds going to infrastructure projects, Tilt-Up contractors can pursue projects including site cast retaining walls, bridge components and other similar applications,” said Simmons.

LOOKING FORWARD

Many in the industry are beginning to see signs of recovery and are optimistic about the future. Contractors who have used the market downturn to refine their practices, pursue new business and market their firms will be well-poised for success during the recovery. The site-cast Tilt-Up industry has aggressively pursued new markets, including projects with sustainable goals, adaptive reuse and even small scale structures.

According to Sauter, now is the time to make the most out of association memberships and capitalize on their resources. “TCA understands the challenges facing our membership and has refined our message for venues such as the Annual Convention to address their concerns and provide them with valuable information to weather this storm,” said Sauter. “TCA is developing new programs, including contractor certification, to allow Tilt-Up contractors to better compete with other forms of construction.”

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TILT-UP TODAY, a publication of the Tilt-Up Concrete Association, is THE source for Tilt-Up industry news, market intelligence, business strategies, technical solutions, product information, and other resources for professionals in the Tilt-Up industry. A subscription to TILT-UP TODAY is included in a TCA membership. Subscriptions for potential TCA members are also available. If you would like to receive a complimentary subscription to the publication, please contact the TCA.